Ferreira v. Mortgage Electronic Registration Systems, Inc.
794 F. Supp. 2d 297
D. Mass.2011Background
- On February 28, 2007, Magna Ferreira refinanced with a $423,000 loan from New Century, secured by a mortgage on the Property; Marco Ferreira was a joint owner but not a signatory to the Note.
- At closing, Mrs. Ferreira received at least one copy of the Notice of Right to Cancel and signed acknowledging receipt of two copies.
- After closing, the loan was transferred to Deutsche Bank, which retained Saxon Mortgage Services to service the loan; Saxon did not own the loan.
- Mrs. Ferreira received nearly $50,000 in cash from the refinance and soon defaulted; foreclosure proceedings followed.
- In 2009, the court ordered escrow deposits of $1,364 per month; payments were made through November 2010, then stopped, and no further escrow deposits were made.
- Defendants moved for summary judgment in December 2010; the proposed rescission amount was $379,719, which plaintiffs had not tendered and could not show they could tender.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CCCDA liability against defendants | CCCDA may be asserted against loan originator/assignee | Servicer without ownership cannot be liable; MERS may be liable but not necessary | Saxon not liable; originator/assignee potential liability but not applicable to Saxon |
| Who may exercise the right to rescind | Favors rescission for borrowers | Only obligor may rescind; non-obligor lacks standing | Mrs. Ferreira, as sole obligor, bears right to rescind; Mr. Ferreira lacks standing |
| Effect of receiving the required disclosures | Right to rescind extended due to disclosures | Receiving at least one copy suffices; no extended period | Two-copy receipt required per statute, but only one copy received; no extended rescission period; presumption of receipt remains unrebutted |
| Tender requirement and CCCDA viability | Rescission should be available with tender | Tender not addressed unless CCCDA violation exists | Court declines to address tender because no viable CCCDA violation supporting rescission |
| Chapter 93A claim | CCCDA violations support Chapter 93A claim | No CCCDA violation, thus no Chapter 93A liability | Defendants entitled to summary judgment on Chapter 93A as CCCDA claim fails |
Key Cases Cited
- Mesnick v. Gen. Elec. Co., 950 F.2d 816 (1st Cir. 1991) (summary judgment standard; pierce pleadings to assess need for trial)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Sup. Ct. 1986) (materiality; genuine issue of fact required for trial)
- Rivera-Torres v. Rey-Hernandez, 502 F.3d 7 (1st Cir. 2007) (summary judgment standard in the First Circuit)